Maturity-onset diabetes of the young 1 (MODY1) is a monogenic diabetes condition caused by heterozygous HNF4A mutations. We investigate how HNF4A haploinsufficiency from a MODY1/HNF4A mutation influences the development of foregut-derived liver and pancreatic cells through differentiation of human induced pluripotent stem cells from a MODY1 family down the foregut lineage. In MODY1-derived hepatopancreatic progenitors, which expressed reduced HNF4A levels and mislocalized HNF4A, foregut genes were downregulated, whereas hindgut-specifying HOX genes were upregulated. MODY1-derived hepatocyte-like cells were found to exhibit altered morphology. Hepatic and β cell gene signatures were also perturbed in MODY1-derived hepatocyte-like and β-like cells, respectively. As mutant HNF4A (p.Ile271fs) did not undergo complete nonsense-mediated decay or exert dominant negativity, HNF4A-mediated loss of function is likely due to impaired transcriptional activation of target genes. Our results suggest that in MODY1, liver and pancreas development is perturbed early on, contributing to altered hepatic proteins and β cell defects in patients.